Search Advanced

Quantitative Finance and Economics

2021, Volume 5, Issue 1: 1-18. doi: 10.3934/QFE.2021001
Previous Article Next Article
Research article

Intellectual capital and high-tech firms' financing choices in the European context: a panel data analysis

  • 1.
    ISCA-UA, University of Aveiro, The Research Unit on Governance, Competitiveness and Public Policies (GOVCOPP), Aveiro, Portugal
  • 2.
    Universidade Portucalense, Porto, Portugal
  • 3.
    Department of Management and Economics, University of Beira Interior, CEFAGE-UBI—The Centre for Advanced Studies in Management and Economics of the University of Beira Interior Covilhã, Portugal
  • Received: 15 September 2020 Accepted: 08 December 2020 Published: 11 December 2020

  • JEL Codes: G32

  • This paper seeks to analyse the relationships between listed high-tech firms' financing choices and intellectual capital (IC). It also analyses the impact of ownership concentration on IC investments in high-tech firms. The data set was gathered from the Datastream database for a sample of listed high-tech firms in 14 Western European countries for the period between 2004 and 2015. The data set has an unbalanced panel structure, with the number of years of observations on each firm varying between 3 and 12. We use dynamic panel data models, the GMM system (1998) estimator. Results suggest that internal finance and equity issues are positively while debt is negatively related to IC in high-tech firms. High-tech firms seem to rely on equity issues and internal finance, avoiding debt to fund IC assets. Ownership concentration is negatively related to IC investments in high-tech firms. To the authors' knowledge, this is the first study exploring the relationships between financing choices and IC in high-tech firms. The findings also contribute to the literature by analysing the impact of ownership concentration on IC investments of high-tech firms.

    Citation: Filipe Sardo, Zélia Serrasqueiro. Intellectual capital and high-tech firms' financing choices in the European context: a panel data analysis[J]. Quantitative Finance and Economics, 2021, 5(1): 1-18. doi: 10.3934/QFE.2021001

    Related Papers:

  • This paper seeks to analyse the relationships between listed high-tech firms' financing choices and intellectual capital (IC). It also analyses the impact of ownership concentration on IC investments in high-tech firms. The data set was gathered from the Datastream database for a sample of listed high-tech firms in 14 Western European countries for the period between 2004 and 2015. The data set has an unbalanced panel structure, with the number of years of observations on each firm varying between 3 and 12. We use dynamic panel data models, the GMM system (1998) estimator. Results suggest that internal finance and equity issues are positively while debt is negatively related to IC in high-tech firms. High-tech firms seem to rely on equity issues and internal finance, avoiding debt to fund IC assets. Ownership concentration is negatively related to IC investments in high-tech firms. To the authors' knowledge, this is the first study exploring the relationships between financing choices and IC in high-tech firms. The findings also contribute to the literature by analysing the impact of ownership concentration on IC investments of high-tech firms.


    加载中


    [1] Aboody D, Lev B (2000) Information asymmetry, R & D and insider gains. J Financ 55: 2747–2766. doi: 10.1111/0022-1082.00305
    [2] Aghion P, Bond S, Klemm A, et al. (2004) Technology and Financial Structure: Are Innovative Firms Different? J Eur Econ Assoc 2: 277–288.
    [3] Arellano M, Bond S (1991) Some Tests of Specification for Panel Data: Monte Carlo Evidence and Application to Employment Equations. Rev Econ Stud 58: 277–297. doi: 10.2307/2297968
    [4] Arellano M, Bover O (1995) Another Look at the Instrumental Variable Estimation of Error-Components Models. J Econometrics 68: 29–52. doi: 10.1016/0304-4076(94)01642-D
    [5] Berk JB, Stanton R, Zechner J (2010) Human Capital, Bankruptcy and Capital Structure. J Financ 65: 891–926. doi: 10.1111/j.1540-6261.2010.01556.x
    [6] Blass AA, Yosha O (2003) Financing R & D in Mature Companies: An Empirical Analysis. Econ Innovation New Technol 12: 425–447. doi: 10.1080/1043859022000029249
    [7] Blundell R, Bond S (1998) Initial conditions and moment restrictions in dynamic panel data models. J Econometrics 87: 115–143. doi: 10.1016/S0304-4076(98)00009-8
    [8] Bohdanowicz L (2014) Managerial Ownership and Intellectual Capital Efficiency: Evidence from Poland. China-USA Bus Rev 13: 626–635.
    [9] Bohdanowicz L, Urbanek G (2013) The Impact of Ownership Structure on Intellectual Capital Efficiency: Evidence from Polish Emerging Market, In: International Scientic Conference "New Challenges of Economic and Business Development—2017: Digital Economy", University of Latvia, Riga, Latvia.
    [10] Bond S, Elston J, Mairesse J, et al. (2003) Financial factors and investment in Belgium, France, Germany, and the United Kingdom: A comparison using company panel data. Rev Econ Stat 85: 153–165. doi: 10.1162/003465303762687776
    [11] Brown JR, Fazzari SM, Petersen BC (2009) Financing Innovation and Growth: Cash Flow, External Equity, and the 1990s R & D Boom. J Financ 64: 151–185. doi: 10.1111/j.1540-6261.2008.01431.x
    [12] Brown JR, Petersen BC (2009) Why has the Investment-Cash Flow Sensitivity Declined so Sharply? Rising R & D and Equity Market Developments. J Bank Financ 33: 971–984. doi: 10.1016/j.jbankfin.2008.10.009
    [13] Burkart M, Gromb D, Panunzi F (1997) Large shareholders monitoring, and the value of the firm. Q J Econ 112: 693–728. doi: 10.1162/003355397555325
    [14] Carpenter RE, Petersen BC (2002) Capital Market Imperfections, High-Tech Investment, and New Equity Financing. Econ J 112: 54–72. doi: 10.1111/1468-0297.00683
    [15] Campello M, Giambona E (2013) Real Assets and Capital Structure. J Financ Quant Anal 48: 1333–1370. doi: 10.1017/S0022109013000525
    [16] Celenza D, Rossi F (2013) Ownership concentration, intellectual capital, and firm performance: evidence from Italy. China-USA Bus Rev 12: 1157–1174.
    [17] Chen M, Cheng S, Hwang Y (2005) An empirical investigation of the relationship between intellectual capital and firms' market value and financial performance. J Intellect Cap 6: 159–176. doi: 10.1108/14691930510592771
    [18] Cincera M, Ravet J, Veugelers R (2015) The sensitivity of R & D investments to cash flows: comparing young and old EU and US leading innovators. Econ Innovation New Technol 25: 1–17.
    [19] Cummins J, Hasset K, Oliner S (2006) Investment behavior, observable expectations, and internal funds. Am Econ Rev 96: 796–810. doi: 10.1257/aer.96.3.796
    [20] Edvinsson L, Malone M (1997) Intellectual Capital: Realizing Your Company's True Value by Finding its Hidden Roots, New York, NY: Harper Collins.
    [21] European Commission (2006–2014) The EU Industrial R & D Investment Scoreboard. Joint Research Centre, Institute for Prospective Technological Studies and Directorate General Research, Scientific and Technical Research series. Seville (Spain). Available from: https://publications.jrc.ec.europa.eu/repository/bitstream/JRC98287/ipts%20jrc%2098287%20(online)%20completo.pdf.
    [22] Dženopoljac V, Yaacoub C, Elkanj N, et al. (2017) Impact of intellectual capital on corporate performance: evidence from the Arab region. J Intellect Cap 18: 884–903. doi: 10.1108/JIC-01-2017-0014
    [23] Ferrando A, Preuss C (2018) What finance for what investment? Survey-based evidence for European companies. Econ Politica 35: 1015–1053. doi: 10.1007/s40888-018-0108-4
    [24] Gatchev VA, Spindt PA, Tarhan V (2009) How do firms finance their investments? The relative importance of equity issuance and debt contracting costs. J Corp Financ 15: 179–195. doi: 10.1016/j.jcorpfin.2008.11.001
    [25] Guariglia A (2008) Internal financial constraints, external financial constraints, and investment choice: Evidence from a panel of UK firms. J Bank Financ 32: 1795–1809. doi: 10.1016/j.jbankfin.2007.12.008
    [26] Gujarati D, Porter D (2010) Essentials of Econometrics (4th ed.), New York: McGraw—Hill International.
    [27] Hall BH, Lerner J (2010) The Financing of R & D and Innovation, In: Hall BH and Rosenberg N (Eds.), Handbook of the Economics of Innovation, North Holland: Elsevier.
    [28] Hall BH, Moncada-Paternò-Castello P, Montresor S, et al. (2016) Financing constraints, R & D investments and innovative performances: new empirical evidence at the firm level for Europe. Econ Innovation Technol 25: 183–196. doi: 10.1080/10438599.2015.1076194
    [29] Hogan T, Hutson E (2005) Information Asymmetry and Capital Structure in SMEs: New Technology-Based Firms in the Irish Software Sector. J Global Financ 15: 369–387. doi: 10.1016/j.gfj.2004.12.001
    [30] Hovakimian A, Opler T, Titman S (2001) The Debt-Equity Choice. J Financ Quant Anal 36: 1–24. doi: 10.2307/2676195
    [31] Lev B (2004) Sharpening the intangibles edge. Harvard Bus Rev 82: 109–116.
    [32] Lev B (2005) Intangible Assets: Concepts and Measurements, Elsevier Inc.
    [33] Lev B, Sougiannis T (1996) The capitalization, amortization, and value-relevance of R & D. J Accounting Econ 21: 107–138. doi: 10.1016/0165-4101(95)00410-6
    [34] Lev B, Zambon S (2003) Intangibles and intellectual capital: an introduction to a special issue. Eur Accounting Rev 12: 597–603. doi: 10.1080/0963818032000162849
    [35] Lim S, Macias A, Moeller T (2020) Intangible Assets and Capital Structure. J Bank Financ 118: 105873.
    [36] Liu Q, Wong K (2011) Intellectual Capital and Financing Decisions: Evidence from the U.S. Patent Data. Manage Sci 57: 1861–1878. doi: 10.1287/mnsc.1110.1380
    [37] MacKie-Mason JK (1990) Do Taxes Affect Corporate Financing Decisions? J Financ 45: 1471–1493.
    [38] Magri S (2014) Does issuing equity help R & D activity? Evidence from unlisted Italian high-tech manufacturing firms. Econ Innovation Technol 23: 825–854.
    [39] Mocnik D (2001) Asset Specificity and a Firm's Borrowing Ability: An Empirical Analysis of Manufacturing Firms. J Econ Behav Organ 45: 69–81. doi: 10.1016/S0167-2681(00)00166-9
    [40] Moncada-Paternò-Castello P (2016) EU corporate R & D intensity gap: What has changed over the last decade? Seville (Spain): JRC Working Papers on Corporate R & D and Innovation No. 05/2016, JRC102148, Growth and Innovation Directorate, Joint Research Centre—European Commission.
    [41] Myers S (1984) The Capital Structure Puzzle. J Financ 39: 575–592. doi: 10.2307/2327916
    [42] Myers S, Majluf N (1984) Corporate Financing and Investment Decisions when Firms Have Information That Investors Do Not Have. J Financ Econ 13: 187–221. doi: 10.1016/0304-405X(84)90023-0
    [43] OECD (1997) Revision of the High-Technology Sector and Product Classification, by Hatzichronoglou, T. OECD Science, Technology and Industry Working Papers, 1997/2, OECD Publishing, Paris (France).
    [44] Porter ME, Ketels CHM (2003) UK Competitiveness: Moving to the Next Stage, DTI Economics Paper.
    [45] Prendergast C (2002) The tenuous trade-off between risk and incentives. J Polit Econ 110: 1071–1102. doi: 10.1086/341874
    [46] Roodman DM (2006) How to do Xtabond2: An Introduction to Difference and System GMM in Stata. Paper presented at the Center for Global Development, Working Paper 103.
    [47] Roodman DM (2009) A note on the theme of too many instruments. Oxford B Econ Stat 71: 135–158. doi: 10.1111/j.1468-0084.2008.00542.x
    [48] Saleh M, Rahman M, Hassan M (2009) Ownership Structure and Intellectual Capital performance in Malaysia. Asian Acad Manage J Accounting Financ 5: 1–29.
    [49] Sardo F, Serrasqueiro Z (2017) A European Empirical Study of the Relationship Between Firms' Intellectual Capital, Financial Performance and Market Value. J Intellect Cap 18: 771–788. doi: 10.1108/JIC-10-2016-0105
    [50] Sardo F, Serrasqueiro Z (2018) Intellectual Capital, Growth Opportunities, and Financial Performance in European Firms: Dynamic Panel Data Analysis. J Intellect Cap 19: 747–767. doi: 10.1108/JIC-07-2017-0099
    [51] Scafarto V, Ricci F, Scafarto F (2016) Intellectual capital and firm performance in the global agribusiness industry The moderating role of human capital. J Intellect Cap 17: 530–552. doi: 10.1108/JIC-11-2015-0096
    [52] Serenko A, Bontis N (2004) Meta-review of knowledge management and intellectual capital literature: citation impact and research productivity rankings. Knowl Process Manage 11: 185–198. doi: 10.1002/kpm.203
    [53] Stiglitz JE, Weiss A (1981) Credit Rationing in Markets with Imperfect Information. Am Econ Rev 71: 393–409.
    [54] Sydler R, Haefliger S, Pruksa R (2014) Measuring intellectual capital with financial figures: Can we predict firm profitability? Eur Manage J 32: 244–259.
    [55] Titman S, Wessels R (1988) The determinants of capital structure choice. J Financ 43: 1–19. doi: 10.1111/j.1540-6261.1988.tb02585.x
    [56] Vilasuso J, Minkler A (2001) Agency costs, asset specificity, and the capital structure of the firm. J Econ Behav Organ 44: 55–69. doi: 10.1016/S0167-2681(00)00151-7
    [57] Xu J, Wang B (2018) Intellectual capital, financial performance and companies' sustainable growth: evidence from the Korean manufacturing industry. Sustainability 10: 4651.
    [58] Wang Z, Wang N, Liang H (2014) Knowledge sharing, intellectual capital and firm performance. Manage Decis 52: 230–258. doi: 10.1108/MD-02-2013-0064
    [59] Williamson OE (1988) Corporate finance and corporate governance. J Financ 43: 567–592. doi: 10.1111/j.1540-6261.1988.tb04592.x
    [60] Windmeijer F (2005) A finite sample correction for the variance of linear efficient two-step GMM estimators. J Econometrics 126: 25–51. doi: 10.1016/j.jeconom.2004.02.005
    [61] Wooldridge JM (2007) Econometric analysis of cross section and panel data, Cambridge: The MIT Press.
  • QFE-05-01-001-s001.pdf
  • Reader Comments
  • © 2021 the Author(s), licensee AIMS Press. This is an open access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0)
通讯作者: 陈斌, bchen63@163.com
  • 1. 

    沈阳化工大学材料科学与工程学院 沈阳 110142

  1. 本站搜索
  2. 百度学术搜索
  3. 万方数据库搜索
  4. CNKI搜索
Quantitative Finance and Economics
3.2 0.3

Metrics

Article views(2816) PDF downloads(354) Cited by(9)

Preview PDF
Download XML
Export Citation
Article outline

Figures and Tables

Tables(4)

Other Articles By Authors

Related pages

Tools

/

DownLoad:  Full-Size Img  PowerPoint
Return
Return

Catalog